Income Building: What is work for? ? Gerken Financial Coaching ...

A dream doesn?t become reality through magic; it takes sweat, determination and hard work.?~ Colin Powell

Your best wealth building tool is your income.

Many people who are trying to work their way out of debt, focus on the size of the debt and how to pay it off. The mountain in front of them is so large that they can not see around it to realize that the problem may not be the debt so much as the lack of income. Debt may be a symptom of a larger problem or it the debt may just be a lack of organization and paying attention to where your money is going. Over the next few blogs I will discuss the income side of personal finance and how building up your income can not only help you to pay off debt faster, but build your savings as well.

Create a?life plan

When we begin to work, after we get out of school, we initially focus on making enough money to move out of our parent?s home and support ourselves independently. The boomerang generation, aged 25 to 34, is having a hard time doing this according to a?recent survey. What you need is a life plan. One of our goals for our lives should be?in a position to retire from work at a reasonable?age and be able to support ourselves with our savings. In order to do this we must save a portion of our income?each year that we work. In today?s society, many people spend more than they make each year, which works out to be a negative savings rate. This does not bode well for our future. So what is your plan?

How much money would you like to have?

To make a plan we need to start at the end and work backwards.?How much yearly income would you like when you retire? Could you live on $50,000 per year? If your home were paid?off, could you live on less or, if your home were paid off what would you do with extra income?Use this retirement calculator?to help?you determine?how much you need to save for retirement.?This may be?a pretty depressing number, but it also may not be as bad as you think. Let?s just ay that you are now prepared to do what it takes to reach your retirement goals by working and saving.

What do I want to be when I grow up?

The next step is to figure out if your current job will get you to where you want to be. Are you happy with your current employment? If you could do anything or?work anywhere, is this where you would choose? Take some time to brainstorm and dream. You want to be someplace where you enjoy getting out of bed and going to work. If you are doing work?that you love your income will increase over time. What type of personality?do you have? Are you a leader, a detail person, social?or outgoing, loyal??Knowing your personality will help you to match your character traits and skills to a job that will give you energy, not drain you.

Identifying your strengths and weaknesses in the job market, getting additional training or seeking a new position where your strengths are an asset will get you pointed in the right direction to build your income and your retirement savings.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community by speaking, teaching workshops and coaching individual and families in personal finance.

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